Homeowners are being urged to do one thing to protect their finances as hundreds of mortgage deals are pulled from the market. Mortgage rates have been rising amid changing market expectations sparked by the US-Israeli war with Iran.

According to financial information website Moneyfacts, the average two-year fixed-rate homeowner mortgage on the market has risen from 4.83% at the start of March to 5.35%. The average five-year fixed homeowner mortgage rate has risen from 4.95% at the start of March to 5.39%. Mark Harris from mortgage broker SPF Private Clients told The Times borrowers should take action and secure a rate now if they are going to need a mortgage in the next six months.

Adam French, Head of Consumer Finance at Moneyfacts, said the swap rates that underpin mortgage pricing have risen sharply following the Bank of England’s decision to hold the base rate at 3.75%.

He said markets have been interpreting comments from the Bank as leaving the door open to rate rises amid “Trumpflation” fears.

Mr French added: “With two and five-year swaps now sitting at their highest level in more than a year, lenders are once again facing higher funding costs and this will feed through into mortgage pricing.”

The expert said while a quicker end to the conflict in the Middle East could ease pressure on rates, the reality is a more volatile world is a more expensive world.

He added: “Even though the most competitive deals will remain below average, anyone looking to buy or re-mortgage this year needs to prepare for higher costs than previously expected.”

The Bank kept rates unchanged at 3.75% after all nine members of the Monetary Policy Committee (MPC) voted for a hold on Thursday

Only a few weeks ago, a cut to 3.5% looked almost nailed in, but the start of the war on February 28 appears to have scotched hopes of an imminent reduction in rates as inflation is set to surge.

Consumer Prices Index (CPI) inflation fell to 3% in January, and MPC forecasts in February showed the rate falling toward 2% from April, largely due to Government efforts to cut household energy bills.

But these forecasts are now all out of date after the Middle East conflict sent oil and gas prices rocketing higher, which is set to push up the cost of living in the UK and many countries worldwide.

The MPC now expects inflation to be around 3% in the second quarter of 2026, up from the 2.1% which had been forecast in February. The committee forecasts a rise potentially up to 3.5% in the third quarter.

Some members of the MPC signalled rates may have to rise in the event of a prolonged conflict, but added such a move would not be rushed.